Government to Take Back Control as universities get their most thoughtful kicking to date

At over 200 pages and 50 recommendations, the Augar report does not disappoint as a meaty piece of policy work. It will take us some time to fully digest its many implications, the job of which we’ve started work on already and will involve the ideas and analysis of countless experts from inside and outside universities. I write this article having read it all the way through once, not having had sight of much of the underlying research or funding datasets. This is my hot take in which I am only able to cover a precious few specific aspects of the report – there’s a great deal more analysis to follow.

My colleague Debbie McVitty has produced your day one cut-out-and-keep guide to the report which is where I strongly recommend you start.

One sector to rule them all

I have long felt that we create meaningless divides between higher and further education when instead of “how can we arrange one individual sector” a better question is always something like “what are the skills needs of the post-18 population in 2022”. It’s pleasing therefore that the Augar review situates higher education as part of this tertiary landscape and the whole system is explained in clear-eyed terms lacking from other government-sponsored efforts.

Higher education is marked out as special in some important ways – some positive – but most notably in the report, special, in how expensive it is to study in it, payback after graduating, run its institutions or to fund and underwrite the whole system that underpins it.

And this is where we very quickly run into trouble. The report has numerous indictments of higher education that are going to be painful reading in the sector and could have the effect of pushing public opinion further in the wrong direction.

How the sausages are made

There are plenty of warm words to cushion the pain, but they can be mostly dismissed as its clear where the authors’ ire is directed. In comparing HE and FE, universities come out very badly: according to its costs study, universities siphon off around a thousand pounds from each tuition fee for “sustainability”. That’s a thousand pounds not used for teaching or research, just to put in the coffers. Compare that with the stark picture painted in the report of further education colleges in crisis and their hand-to-mouth existence. Universities do not compare well, for the report’s authors, nor they suspect, for students and taxpayers.

“How does this look from outside the sector?” is a question not asked enough inside it.

Other examples likely to be leapt on include the section on costs of different subjects and the review of how universities report their spending. As you’d expect, spending has risen in line with income. But why have lower-cost courses seen higher increases in spending that more resource-intensive subjects?

It is difficult to explain why spend on, for example, Humanities, such as History, and Social Studies should have increased at more than twice the rate of Physics and Engineering, for any other reason than that the additional income became available attached to these subjects”. (p.73)

It is difficult.

It is improbable that the reasonable costs of teaching English or History have risen at two and a half times the rate for the reasonable costs of teaching Chemistry and Engineering.” (p.73)

It is indeed, improbable.

We’re left with two alternatives: universities are indeed spending more on these subjects to show value for their high fees, or the way they are reporting spending in TRAC is a giant con. Either way, it leads to an uncertain future particularly for many arts and humanities subjects which under these proposals, would face a much harder road to justify their funding.

But these most severe of challenges shouldn’t detract from the report’s wider intentions which I think are the right ones: it seeks to truly understand both institutional behaviour and the various funding levers that institutions respond to – something we need to understand if we have any hope of discussing, let alone reforming the system on reasonable and lasting terms. And it does this in order to start a renaissance in level four and five education.

Steps forward and backwards

If the £9,000 fee was an overly simplistic policy (and comes in for quite a kicking by Augar), the report is under the bonnet, unpicking the complexity that emerged underneath a headline number that was deceptive in its simplicity. Browne made it appear that a straightforward, transactional switch was being made between government teaching grants and tuition fees but this was a sleight of hand.

After years of paying the PR price for being “awash with cash” it appears as if in coming years, universities are going to start paying the actual cost of those reforms. And it comes at a high price: changes in the fee system that will bring cuts estimated at 11 per cent over five years.

For students and graduates, a pure Augar system will still likely be a mixed bag and extremely complicated – in contrast to its cousin in the Diamond review of Welsh HE that provided a simple “retail” offer that was easy to digest. Augar’s increasing of the repayment window from thirty to forty years may make economic sense (and the jury is still out on that), but it’s unlikely to play well with those already minded to be fearful of the debt burden. And at first sight of the report without more underlying modelling, it’s impossible to know if the return of maintenance grants will benefit a large number of students or just a handful of the most marginal – the costings provided do not make this clear.

Boom and bust

A huge amount of stock is placed in the fact that the demographics are going to start booming again in a few years as more 18-year-olds than ever come of age. We’ve written about this and colleagues have modelled it extensively. The Augar review has gone a step further and puts these predictions in the bank. It’s the “get out of jail free” card that pays for rising costs of pensions and the costs of the other reforms to the system. It’s an interesting approach and quite a gamble, hinging on universities’ competency in “Operational Gearing” (something else for us all to read up on).

But whether universities will be able to scale quickly enough or effectively enough to meet the huge tide of potential new students in the system remains highly questionable. It also kicks much of the responsibility for making the system work to the sector itself – a theme repeated in many of the other sections including the discussion on minimum entry grades. The much-maligned DDD proposal is discussed and left as an option “Unless the sector has moved to address the problem of recruitment to courses which have poor retention, poor graduate employability and poor long term earnings benefits by 2022/23” – if not then the government should intervene with “a form of a contextualised minimum entry threshold, a selective numbers cap or a combination of both” (p.102).

It’s a major challenge and one that’s likely to cause significant consternation.

Taking back control

But overall, it appears as if Augar wrestles more power to the government and the Office for Students, away from universities. OfS’s funding allocations, with more teaching grant to play with in the future, could decide the fate of many subjects and the universities they are taught in.

Having ceded too many of its levers in the form of £9,000+ fees, the government now wants to Take Back Control. A natural rebalancing, you could argue, and the theme of our times, after the short and unhappy life of a fees and loans system that while successful in many ways, left one of its most important stakeholders (The Treasury) out in the cold and students and taxpayers in the dark thanks to its more byzantine qualities and universities’ own approach to spending. Things have not been helped by decades of underfunding every other part of the tertiary education sector – a consistent and dramatic failing of successive governments – and although the sector might now be looking at a world where it bears some of the cost of all this, it’s a failure of politicians first and foremost.

Squeaky bum time

A harsh, bright, surgical light is shining on universities today and for many, this will feel extremely uncomfortable. It’s clear that the Augar review will not be easily dismissed – it’s far too serious, authoritative and detailed for that – something that in time I predict the sector will be thankful for. It’s infinitely better to have a set of evidenced proposals that although may come under plenty of valid criticism, have been made so very carefully. The Browne model of policymaking stands in stark contrast: slash and burn, divide and conquer, blind with lights and hope for the best, all to save the neck of politicians, and then watch a few short years later while it unravels.

But the Prime Minister who commissioned Philip Augar is on her way out, it’s unclear who will take over, how they will use this report, and which, if any, politician it will actually help in the near or medium term. It’s been far less interfered with by politicians than is commonly assumed. To demonstrate this, you only need to look as far as Damian Hinds scrambling around for lines (not provided by Augar) to make him sound tough on universities for the benefit of the right-wing press and its Tory base.

The government’s review of post-18 education funding, we are told, is still ongoing, taking this advisory report and studying it closely. It’s clear that many of its proposals will come to a head in the spending review negotiations so if the sector has a clear new target, it’s that. But with the Tory leadership election only just heating up, it’s going to be a moving target for some time to come.

And away from politics, there’s a genuine opportunity. Taking the report on face value, and in the spirit I believe that it is intended, will be an important first step in the big debate to come about the future of post-18 education and universities’ own vital role within it. Let’s not let it go to waste or wait for the politicians to make an even bigger hash of things than they have already.

Join us on 2 July in London for a one day conference to analyse and digest the Augar review and begin to build the response.